Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help The following financial information is for Cullumber Company. CULLUMBER COMPANY Balance Shepts December 31 begin{tabular}{lrc} Assets & 2019 & 2018 Cash &

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

please help

The following financial information is for Cullumber Company. CULLUMBER COMPANY Balance Shepts December 31 \begin{tabular}{lrc} Assets & 2019 & 2018 \\ Cash & $70,000 & $64,000 \\ Debt investments (short-term) & 53,000 & 39,000 \\ Accounts receivable & 108,000 & 90,000 \\ Inventory & 229,000 & 162,000 \\ Prepaid expenses & 30,000 & 25,000 \\ Land & 130,000 & 130,000 \\ Building and equipment (net) & 264,000 & 185,000 \\ \hline Total assets & $884,000 & $695,000 \\ \hline \end{tabular} Liabilities and Stockholders' Equity \begin{tabular}{lrr} Notes payable & $172,000 & $102,000 \\ Accounts payable & 65,000 & 51,000 \\ Accrued liabilities & 41,000 & 41,000 \end{tabular} \begin{tabular}{lrr} Liabilities and Stockholders' Equity & & \\ Notes payable & $172,000 & $102,000 \\ Accounts payable & 65,000 & 51,000 \\ Accrued liabilities & 41,000 & 41,000 \\ Bonds payable, due 2022 & 250,000 & 172,000 \\ Common stock, $10 par & 202,000 & 202,000 \\ Retained earnings & 154,000 & 127,000 \\ Total liabilities and stockholders' equity & $884,000 & $695,000 \end{tabular} CULLUMBER COMPANY Income Statements For the Years Ended December 31 \begin{tabular}{lcc} & 2019 & 2018 \\ Sales revenue & $890,000 & $786,000 \\ Cost of goods sold & 641,000 & \\ Gross profit & 247,000 & 211,000 \\ Operating expenses & 194,000 & 159,000 \\ Net income & $55,000 & $52,000 \\ \hline \end{tabular} Additional information: 1. Inventory at the beginning of 2018 was $116,000. 2. Accounts receivable (net) at the beginning of 2018 were $90,000. 3. Total assets at the beginning of 2018 were $642,000. 4. No common stock transactions occurred during 2018 or 2019. 5. All sales were on account. Compute the liquidity and profitability ratios of Cullumber Company for 2018 and 2019. (Round all answers to 2 decimal places, e.g. 1.83 or 1.83%. If \% change is a decrease show the numbers as negative, e.g. 1.83% or (1.83%).) Situation Ratio 1. 18,000 shares of common stock were sold at par on July 1,2020 . Net income for 2020 was $53,000. 2. All of the notes payable were paid in 2020. All other liabilities remained at their December 31,2019 , levels. At December 31, 2020, total assets were $904,000. 3. The market price of common stock was $9.00 and $13.00 on December 31,2019 and 2020 , respectively. Net income for 2020 was $53,000. Return on common stockholders' equity Debt to assets ratio Price-earnings ratio The following financial information is for Cullumber Company. CULLUMBER COMPANY Balance Shepts December 31 \begin{tabular}{lrc} Assets & 2019 & 2018 \\ Cash & $70,000 & $64,000 \\ Debt investments (short-term) & 53,000 & 39,000 \\ Accounts receivable & 108,000 & 90,000 \\ Inventory & 229,000 & 162,000 \\ Prepaid expenses & 30,000 & 25,000 \\ Land & 130,000 & 130,000 \\ Building and equipment (net) & 264,000 & 185,000 \\ \hline Total assets & $884,000 & $695,000 \\ \hline \end{tabular} Liabilities and Stockholders' Equity \begin{tabular}{lrr} Notes payable & $172,000 & $102,000 \\ Accounts payable & 65,000 & 51,000 \\ Accrued liabilities & 41,000 & 41,000 \end{tabular} \begin{tabular}{lrr} Liabilities and Stockholders' Equity & & \\ Notes payable & $172,000 & $102,000 \\ Accounts payable & 65,000 & 51,000 \\ Accrued liabilities & 41,000 & 41,000 \\ Bonds payable, due 2022 & 250,000 & 172,000 \\ Common stock, $10 par & 202,000 & 202,000 \\ Retained earnings & 154,000 & 127,000 \\ Total liabilities and stockholders' equity & $884,000 & $695,000 \end{tabular} CULLUMBER COMPANY Income Statements For the Years Ended December 31 \begin{tabular}{lcc} & 2019 & 2018 \\ Sales revenue & $890,000 & $786,000 \\ Cost of goods sold & 641,000 & \\ Gross profit & 247,000 & 211,000 \\ Operating expenses & 194,000 & 159,000 \\ Net income & $55,000 & $52,000 \\ \hline \end{tabular} Additional information: 1. Inventory at the beginning of 2018 was $116,000. 2. Accounts receivable (net) at the beginning of 2018 were $90,000. 3. Total assets at the beginning of 2018 were $642,000. 4. No common stock transactions occurred during 2018 or 2019. 5. All sales were on account. Compute the liquidity and profitability ratios of Cullumber Company for 2018 and 2019. (Round all answers to 2 decimal places, e.g. 1.83 or 1.83%. If \% change is a decrease show the numbers as negative, e.g. 1.83% or (1.83%).) Situation Ratio 1. 18,000 shares of common stock were sold at par on July 1,2020 . Net income for 2020 was $53,000. 2. All of the notes payable were paid in 2020. All other liabilities remained at their December 31,2019 , levels. At December 31, 2020, total assets were $904,000. 3. The market price of common stock was $9.00 and $13.00 on December 31,2019 and 2020 , respectively. Net income for 2020 was $53,000. Return on common stockholders' equity Debt to assets ratio Price-earnings ratio

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Horngrens Cost Accounting A Managerial Emphasis

Authors: Rajan Datar, Srikant M. Datar

16th Edition

9352860195, 978-9352860197

More Books

Students also viewed these Accounting questions

Question

Understand the reasons for engaging consultants

Answered: 1 week ago